The week ahead sees investors focused on poor US economic numbers; Brexit is drawing ever closer for the UK with still no deal in sight, while in the Eurozone we will see a slew of critical manufacturing reports from governments.
Any chance of a trade war breakthrough?
With the WTO clearing the ground for a US-Europe trade war, investors will be begging for some positive progress between Beijing and Washington.
US: markets focused on poor numbers
It is safe to say the markets are…concerned about the global economy. Consistently bad data from most of the world’s major economies, combined with the WTO’s tariff-greenlighting decision, sparked a nasty sell-off last week, and puts even greater pressure on the impending high profile talks between the US and China.
Of course, we have been here many times before at this point, the two superpowers previously coming close – but not close enough – to a trade deal, only to engage in a tit-for-tat episode of escalation. Things are feeling pretty precarious, both economically and politically, at the moment, so some positive chatter in the run up to, and aftermath of, the start of negotiations on Thursday could do wonders for the markets.
If investors can get past the bigger picture, it’s not the most thrilling week for data. The US PPI readings arrive on Tuesday, followed by the FOMC meeting minutes on Wednesday, the inflation numbers on Thursday and preliminary consumer sentiment estimates on Friday.
Another tricky week ahead for sterling
The October 31st Brexit deadline grows ever closer. The EU hasn’t been receptive to Boris Johnson’s border solution. Plus the Prime Minister wants to prorogue Parliament once again (to October 14th). Reason enough, then, for it to be another tricky week for the pound. And that’s before you layer on top the fears that Britain is entering a recession.
Investors will have a better idea of whether or not that’s the case following Thursday’s monthly GDP reading, which comes paired with the manufacturing and industrial production figures.
Eurozone braced for production numbers
The Eurozone has been responsible for a lot of the data stinking up the trading atmosphere of late – will that continue this week?
Monday has the region-wide Sentix investor confidence numbers, followed by the German industrial production, French trade balance and Italian retail sales readings on Tuesday; the German trade balance and French and Italian industrial production estimates on Thursday; and the German and French inflation figures on Friday.
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